Wheat Extends Drop Before USDA Data as Supply Seen Ample

Wheat fell for a second day in Chicago amid speculation that a government report tomorrow will project ample world supplies even as drought damages U.S. crops. Soybeans and corn advanced.

Global stockpiles on May 31 probably will rise to 186.8 million metric tons, and decline little over the following 12 months, according to average estimates in a Bloomberg survey of analysts. The U.S. Department of Agriculture will release its forecast at noon tomorrow in Washington. Prices are off to their best start to a year since at least 1960.

American wheat “is just not competitive on the world markets, as the rally on U.S. crop concerns ignores more than adequate global supplies,” Brian Grete, the editor of the Professional Farmers of America newsletter in Cedar Falls, Iowa, said in a telephone interview. “U.S. prices are about $20 to $40 a ton more expensive than other exporter offers.”

Wheat futures for July delivery fell 0.3 percent to $7.3575 a bushel at 10:56 a.m. on the Chicago Board of Trade, heading for the biggest drop since May 1. The price rose to a 14-month high of $7.44 on May 6.

Sales of U.S. wheat for delivery after June 1 fell 43 percent to 125,039 tons in the week ended May 1, the lowest since March 6, the USDA said today in a report. Accumulated sales for delivery by May 31, 2015, totaled 3.128 million tons, down 15 percent from a year earlier.

Rome-based Agricultural Market Information System, which was set up by Group of 20 agriculture ministers, said inventories at the end of 2014-15 will be 1.1 percent higher than a year earlier at 180 million tons. Growing conditions “are mostly favorable in the Northern Hemisphere,” AMIS said.

Soybean futures for delivery in July advanced 1.3 percent to $14.655 a bushel in Chicago, after dropping to $14.4175 yesterday, the lowest for a most-active contract since March 31.

Corn futures for July delivery rose 0.3 percent to $5.1575 a bushel on the CBOT.

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